Trump will make a historic return to the White House after a decisive victory in the 2024 US election. He is the first Republican nominee to secure the popular vote since 2004. Since then, the President-elect has pledged to bring significant policy shifts regarding massive deportation of undocumented immigrants, pardons for those convicted in the January 6th attack on the U.S. Capitol and a proposal to extend the tax cuts passed during his first term in office.
As Social Security and Medicare are the government's two largest programs in terms of both finances and the number of people impacted, it's important to look at what changes, if any, President Trump has vowed to make in his time in office.
The stakes for Social Security
Social Security is the government's biggest budget item and largest program, accounting for $1.46 trillion in 2024. Of that amount, 3.8% was funded by income taxes on Social Security benefits, while 91.3% was from payroll tax contributions and reimbursements from the General Fund of the Treasury. The program covered 71.6 million workers, according to the latest facts and figures about Social Security, 2024.
Medicare is the second largest budget item (as part of the larger Health spending category), accounting for $848 billion, or roughly 12% of the budget last year, with Medicare enrollment topping 65 million or roughly 25.4% of all 258.3 million adults in the U.S. who are enrolled in the program.
Predicting when Social Security’s trust fund will be exhausted is not an exact science. According to the Social Security Board of Trustees' May 2024 report, the trust fund will be insolvent in November 2035, one year later than previously projected. However, a more recent report from the Congressional Budget Office (CBO) projected that Social Security would run out of money in 2033. Although Social Security would still exist after that time, retirees would likely only receive a smaller percentage, thought to be around 79%, of their full benefits unless congressional lawmakers adopt changes before then. Tactics they may take might involve increasing Social Security payroll tax and trimming benefits.
While Social Security is in danger of running out of cash, Medicare’s finances have improved slightly over the past several years. Even so, Medicare, a federal healthcare program for seniors ages 65 and older and for people entitled to disability benefits, is also expected to encounter a cash crunch in 2036.
Social Security was established by President Franklin D. Roosevelt’s administration in 1935. It provides monthly income to more than 67 million beneficiaries, including retired Americans, disabled workers, survivors of deceased workers, and families. As of December 2023, the number of recipients of Social Security was about 7.4 million. It comes as no surprise, then, that the system is overburdened.
The stakes for Medicare
Medicare is, in essence, a national health plan first visualized by President Teddy Roosevelt. President Harry Truman also fought to get a bill passed during his term, but was unsuccessful, and it was another 20 years before a form of national health insurance — Medicare for Americans 65 and older, and younger people with disabilities — would become a reality.
Today, Medicare serves more than 65 million people million people. It is not private insurance and it doesn't offer plans for families and couples. That means the choices you make regarding the way you get your health coverage is up to you.
According to the annual Medicare Trustees reports, Medicare covers about half of healthcare expenses of enrollees. The remaining costs of healthcare are almost always covered by taking additional private insurance and/or by joining a public Medicare Part C and/or Medicare Part D health plan. These same trustees now project that Medicare's hospital insurance benefits will run out of money in 2036, if not sooner.
However, Medicare care cost projections are uncertain when looking out for more than several decades. This is partially due to scientific advances, therapies and procedures that may change the landscape of health care in the U.S. Conditions untreatable today may be handled routinely in the future and healthcare may become more efficient going forward. However, no one can be certain whether future developments will increase or decrease costs.
How Trump addressed Social Security in his first term
Trump’s approach in the past ties to the belief that a stronger economy would naturally sustain Social Security. He argued then, as he does today, that economic growth and job creation would boost payroll tax revenues, thereby supporting the program. However, experts mostly agree that economic growth alone isn't enough to solve the substantial funding issues facing Social Security.
While the idea of banning taxes on Social Security, which Trump has voiced repeatedly during his campaign, may sway some voters, his proposal to end Social Security taxes could destabilize benefit amounts in the long term.
In his 2011 book, Time to Get Tough, Trump tasked the federal government with honoring a deal by delivering on payouts to workers who've paid into the program for decades. Prior to being elected president, he advised his fellow Republicans to approach the issue carefully, saying during the Conservative Political Action Conference in 2013:
"As Republicans, if you think you are going to change very substantially for the worse Medicare, Medicaid, and Social Security in any substantial way, and at the same time you think you are going to win elections, it just really is not going to happen. ... What we have to do and the way we solve our problems is to build a great economy." In other words, Trump’s position echoes his long-held conviction that the Republican Party should avoid attaching itself to entitlement reform.
Before being elected president in 2016, Trump insisted he would preserve both Medicare and Social Security. However, during his term in office, Trump made no significant headway in remedying Social Security and Medicare's funding issues. Each of his yearly federal budgets proposed spending cuts in Social Security, Medicare and Medicaid. However, the cuts were primarily in reduced payments to healthcare providers and hospitals, as opposed to recipient benefits, and were not enacted, regardless.
The Republican Study Committee proposals
Republicans won both the House and the Senate, giving the GOP control over Congress for at least the next two years. Although both Biden and Trump oppose the major changes to Social Security laid out by the Republican Study Committee (RSC), which includes more than 170 GOP representatives, a 2022 survey showed that many Americans support these or similar proposals.
The RSC's plan rejected two methods aimed at addressing Social Security's solvency issues — increasing taxes and using general funds to pay benefits. Instead, the committee called for three reforms:
- Adjust the full retirement age (FRA) for future retirees based on life expectancy.
- Adjust the primary insurance amount (PIA) benefit formula for anyone not nearing retirement and earning more than the PIA benefit factor for the wealthiest individuals.
- Phase out over time and limit auxiliary benefits (for spouses, divorced spouses, and children) for high-income earners.
Committee chairman Kevin Hern stated (as reported by MSN) that the GOP plan "will not adjust or delay retirement benefits for any senior in or near retirement."
While it isn't surprising that President Biden would oppose these changes, many would assume President-elect Trump would support the GOP proposals. That isn't the case. Last year, Trump stated that "under no circumstances should Republicans vote to cut a single penny from Medicare or Social Security." Recently, his overall stance has remained the same, "you don't have to touch Social Security."
While Trump hasn't provided details on how he plans to keep Social Security solvent, he has made statements at a town hall hosted by Fox News that suggested U.S. oil revenues could help fund the program. In that town hall, he implied that the U.S. could bolster Social Security by increasing oil and gas drilling, a plan that has yet to be rationalized.
Will Trump change the retirement age?
There has been much discussion about increasing the full retirement age (FRA) in the U.S. as lawmakers explore options to ensure the program's solvency. The Senate recently introduced a proposal, called the Social Security Fairness Act to raise the minimum retirement age. As expected, this proposal has sparked widespread concern among retirees who fear reduced benefits.
However, President-elect Trump has made it clear that he will not support raising the retirement age. “I will not cut a single penny from Social Security or Medicare, and I will not raise the retirement age by a single day.” His commitment has been welcomed by those worried about potential benefit reductions.
Will Trump cut Social Security?
In October, the Social Security Administration (SSA) announced that benefits and supplemental security income (SSI) payments will increase by 2.5% in 2025. This cost-of-living adjustment (COLA) will affect over 72.5 million Americans, providing an average increase of about $50 per month. On his campaign website, Trump promised to “protect” Social Security and insisted he wouldn’t cut benefits or otherwise change the program if reelected.
As President-Elect, Trump has maintained this position by recently proposing to eliminate federal taxes on Social Security benefits for retirees. Before 1985, Social Security benefits weren't subject to federal taxes, and currently, only a few states continue to tax them. Trump has also notably rejected increasing the full retirement age (FRA) and has insisted that he won't reduce Social Security benefits.
Along with his proposal to increase America’s oil production to come up with the money to help curtail the looming Social Security shortfall, Trump also says he won’t raise payroll taxes, but he will likely cut them. Both employees and employers fund Social Security via payroll taxes, with each contributing 6.2%. Self-employed workers pay the full 12.4% tax themselves. Trump insists he won’t raise payroll taxes “on his watch.” However, looking back on his first term, he may go even further by lowering payroll taxes instead of just refusing to raise them. Some experts agree this will harm the program and possibly make matters worse.
Some of Trump's other proposals, which include the impact of the Department of Government Efficiency (DOGE), may not move to change Social Security, but could still impact the federal program. For example, DOGE might seek to identify administrative efficiencies within the Social Security Administration as part of spending reduction efforts led by Elon Musk and Vivek Ramaswamy. Trump also proposed eliminating taxes on overtime and tips during his presidential campaign. Both moves could reduce the amount of revenue flowing into Social Security.
It's important to remember that any changes Trump makes to Social Security would not take effect until at least 2026, as only earlier scheduled changes will impact the program in 2025.
Before Trump's reelection, the Committee For a Responsible Federal Budget (CRFB) said that the Trump administration's plan would cause Social Security to become insolvent early, among other things, including:
- Increasing Social Security’s ten-year cash shortfall by $2.3 trillion through 2035.
- Furthering insolvency by three years, from FY 2034 to FY 2031, leading to a 33% across-the-board benefit cut in 2035, up from the 23%.
- Increasing Social Security’s annual shortfall by roughly 50% in FY 2035, from 3.6% to 4% of payroll.
- Requiring the equivalent of reducing current law benefits by about one-third or increasing revenue by about one-half to restore 75-year solvency.
In other words, insolvency could occur earlier in 2031 or at some point in 2032 under the CRFBs high- and low-cost scenarios, respectively.
How Social Security funding could change taxes
In 2024, taxes on Social Security benefits are expected to raise about $94 billion. Data from the Congressional Budget Office (CBO), show the total reduction in revenue would be $1.6 trillion between fiscal years 2026 and 2035 — with $650 billion less for Medicare and $950 billion less revenue for Social Security.
The highest-income households or those making nearly $5 million or more annually would see the biggest benefit from untaxed Social Security income. Hypothetically, if there were no taxes on the benefit they’d get an average tax cut of nearly $2,500 in 2025. Middle- and upper-income households, or those earning between $63,000 and $200,000 would also get a break, as a share of after-tax income. Households in this income range would see a tax cut between $1,190 and $1,430.
Keep in mind that if you file as an individual on your income taxes, and have a total annual income that’s less than $25,000, you won’t have to pay taxes on your Social Security benefits. Single filers with a combined income of $25,000 to $34,000 will pay income taxes on up to 50% of their Social Security benefits. If your combined household income is more than $34,000, you will pay taxes on up to 85% of your Social Security benefits.
How Trump addressed Medicare in his first term
Medicare provides health coverage to more than 63 million Americans over the age of 65. But an aging population and increased enrollment, along with rising healthcare costs, are major factors that have contributed to Medicare’s current financial strain.
Trump stated in 2016 that his administration would act to "Modernize Medicare," which refers to proposals such as premium support and raising the age of Medicare eligibility. Trump supported repealing and replacing the Affordable Care Act (ACA), which many feared would adversely affect the Medicare provisions included in the law, such as drug benefits, improved preventive benefits and numerous Medicare savings proposals.
During his time in office, President Trump did propose some cuts to Medicare, as reported by the New York Times — though experts said these cost reductions would not have significantly affected benefits. (Congress did not enact them.)
Former President Trump also published the Executive Order on Protecting and Improving Medicare for Our Nation’s Seniors in October 2019. The order included an overhaul of the Medicare for All program. The EO states that "Rather than upend Medicare as we know it, my (Trump) Administration will protect and improve it." It went on to say that “Medicare for All” would take away the choices in healthcare currently available within Medicare and centralize even more power in Washington, harming seniors and other Medicare beneficiaries.
The EO states that the Trump administration would protect and improve Medicare by building on those aspects of the program that work well, including the market-based approaches in the current system.
The EO directed Trump's government to build on the access Medicare Advantage beneficiaries have to tax-advantaged medical savings accounts. It also asked the government to determine ways for those beneficiaries to earn cash rewards or rebates in exchange for saving the program money by receiving quality care.
The EO also sought to give seniors more plan choices, cut the administrative costs that healthcare providers pay and reduce the time it takes for Medicare to decide whether to cover a treatment that has received FDA approval.
On the issue of prescription drug costs, Trump previously supported allowing the safe importation of prescription drugs from other countries. Still, that position was never reflected during his campaign or his time in office.
In 2018, then-President Trump signed these five Medicare healthcare changes into law, as reported by PBS:
- Medicare’s Independent Payment Advisory Board was abolished before even starting.
- The rules for Medicare’s Part D drug plans were changed with the coverage gap (or donut hole) in these plans ending (in 2019).
- Consumers who spent a great deal of money on drugs and entered the so-called catastrophic phase of Part D plans will pay no more than a few dollars for each prescription or, for costly drugs, no more than 5% of the cost of the drug.
- Medicare’s caps on covered expenses for outpatient therapy were officially repealed.
- People making more than $500,000 a year ($750,000 for couples) will pay 85% of the actual costs of Part B and D in 2019, up from 80% a year earlier. Most Medicare enrollees pay premiums that equal about 25% of these costs.
- Medicare Advantage plans would now pay for limited long-term care expenses – something that until now has not been covered by Medicare.
What Trump has said about Medicare recently
Agenda47, the Trump administration's official policy platform for the 2024 presidential election, states: “Healthcare and prescription drug costs are out of control. Republicans will increase transparency, promote choice and competition, and expand access to new affordable healthcare and prescription drug options. We will protect Medicare and ensure Seniors receive the care they need without being burdened by excessive costs.”
The document also states that “Republicans will protect Medicare’s finances from being financially crushed by the Democrat plan to add tens of millions of new illegal immigrants to the rolls of Medicare and vow to strengthen Medicare for future generations.”
During the 2024 presidential campaign, former President Trump has repeatedly said that he will not cut Medicare. But, during his presidency, Trump released four successive annual budgets that proposed reducing Medicare spending. Policy experts disagree about whether Medicare beneficiaries would have been hurt by those cuts if enacted.
While it may be still too early for predictions following Trump's reelection, he has maintained his earlier position to “not cut one penny” from Medicare. He also said he’d give Robert F. Kennedy Jr., his pick to run the Department of Health and Human Services, broad rein to reshape health care.
Despite Democratic claims that Trump intends to cut Medicare, Politifactrefers to repeated promises not to. “President Trump has made absolutely clear that he will not cut one penny from Medicare or Social Security,“ (2024 Republican party platform) “We will protect Medicare, and ensure seniors receive the care they need without being burdened by excessive costs.”
Trump tapped Dr. Mehmet Oz to lead the Centers for Medicare and Medicaid Services (CMS), nominating the former Senate candidate to lead the division, as the Trump administration reportedly looks to make cuts to Medicaid and implement Medicare’s private alternative.
Although Trump and the RNC vowed not to cut Medicare, Oz and several key Republicans have advocated for Medicare Advantage, a paid alternative to traditional Medicare coverage managed through private insurers.
The America First Policy Institute, allegedly advising Trump’s transition team, has proposed auto-enrolling people in Medicare Advantage plans rather than Medicare, although both choices would remain available. In August, Oz advocated for Medicare Advantage, calling for Medicare Advantage coverage to be extended to all Americans not enrolled in Medicare. However, there isn’t any indication the Trump administration is considering this idea — yet. As a side note, it is a bit ironic that Oz's plan bears a striking resemblance to Kamala Harris’ 'Medicare for All' proposal.
Although it is too early to speculate on whether or not the privatization of Medicare will become a reality, conservatives say Medicare beneficiaries are better off in Advantage plans, which tend to offer more benefits than the traditional, government-run program. However, critics contend that increasing insurers’ control of the program would trap consumers in health plans that restrict their healthcare and may be much costlier to taxpayers.
Bottom line
It's misleading to say that the issues facing Medicare and Social Security are singularly related to Congress reducing the portion of tax dollars pouring into the programs. It can be argued instead that it is the framework for these programs that lawmakers set up originally. If that's true, the best foot forward would be finding a bipartisan path forward on legislation to change spending or revenue, or both.
Medicare and Social Security have been hot topics of debate for decades. But the fact remains that each program is strapped for cash and there is no easy way out. Both the Republicans under Trump and the Democrats under Biden (and many administrations before them) made promises to overhaul Medicare and Social Security, but clearly, all have come up short.
In line with previous statements, Trump has promised not to cut one penny from Social Security or Medicare and not raise the retirement age by one day.
